The Hong Kong Financial Authority (HKMA) printed a paper outlining the state of analysis on its proposed retail central financial institution digital forex (rCBDC) and plans for its additional improvement. That is the third paper the HKMA has printed on the e-HKD, because the proposed CBDC is known as.
The proposed rCBDC would have a two-tier construction consisting of a wholesale interbank system and the retail consumer pockets system. No wholesale Hong Kong CBDC has been launched but, however analysis on it started in 2017, 4 years earlier than rCBDC planning began. The rCBDC can be disintermediated. The paper notes:
“Whereas it seems that e-HKD may not have an imminent function to play within the present retail fee market, we consider potential use circumstances for e-HKD can emerge rapidly out of the speedy evolution, and even revolution, within the digital economic system.”
One of many use circumstances into account is “utilizing CBDC because the on- and off-ramp instrument for DeFi [decentralized finance].”
Though no begin date is focused within the paper, the native press reported that testing of the rCBDC might start within the fourth quarter of this 12 months.
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The majority of the paper was dedicated to responses to the earlier papers, one in all which was a request for feedback on the technical features of the rCBDC., whereas the opposite handled coverage and design. The papers acquired 75 responses from stakeholders between them.
Nearly all of commenters on the technical side most well-liked that privateness and cybersecurity take priority over effectivity. There was wider vary of opinions on efficiency and scalability.
Offline and cross-border funds and interoperability with current fee techniques had been chief issues expressed in regard to design. Interoperability with mainland China’s e-CNY CBDC, which is now within the pilot stage, was particularly famous.